Setting the ball in motion for a formal process to induct a strategic investor into the company, the newly formed government-appointed Satyam board approved the procedure to invite offers from likely suitors. The board approved the process, to be followed for inviting a strategic investor and decided to seek regulatory approvals early next week. Upon receiving these clearances, the board would announce the process to be observed.
This move follows the company?s plea to the Company Law Board seeking permission to conduct a public auction for induction of a strategic investor and get the funds needed to ensure its uninterrupted operations. Incidentally, the board was also considering a lock-in clause to discourage frivolous bidders. The strategic investors that had shown interest include Larsen and Toubro, which has about 12% stake at present, Spice Group, which is asking for 51% stake in the company, Hinduja Group, Modi Group and HCL Technologies.
After conveying a meeting in Hyderabad, the board confirmed that it is back to its winning ways, riding on the relentless efforts to restore stakeholders confidence and ensure business continuity. ?The board is satisfied with the progress of the company’s stabilisation programme and appreciated the sustained efforts of Satyamites that has helped the company’s revival on a fast track mode,?? Kiran Karnik, chairman of the board said.
?The indomitable spirit of Satyamites has helped us win new purchase orders and work extensions totaling to over $250 million since Jan 7, 2009. The recent successes include a single order of $50 million and multiple orders from across industry verticals, technologies and geographies, reflecting an all round positive trend. More than half of this value comes from new purchase orders, which reinforces the confidence that customers have been sharing with us in our discussions,? Satyam CEO AS Murty said.
Meanwhile, the board had recommended to the ministry of corporate Affairs for removal of Price Waterhouse (PW) as the statutory auditors of the company and notified PW. PW has tendered its resignation to act as statutory auditors of the company. The company is now intending to appoint new statutory auditors.
?The board has authorised AS Murty to finalise and implement a retention plan for its key associates in consultation with Boston Consulting Group and Special Advisors and endorsed actions now underway to fine tune the expenditure and profit optimisation plan? said Achuthan, Satyam board member.
On the usage of funds, Manoharan, director, stated, ?We are using the bank funding in a controlled and phased manner to meet immediate and near-term operating requirements, including payments to vendors. The good news is that we are receiving unsolicited offers from banks for funding.? The company has received loans to the extent of Rs 600 crore from IDBI Bank and Bank of Baroda.